Good morning and good evening, everyone. Welcome to Concord Medical's fourth quarter, full-year 2015 earnings conference call. With us today are Dr.

Jianyu Yang, Chairman and Chief Executive Officer of Concord Medical; Kong Yap, Chief Financial Officer of the Company; Adam Sun, Chief Investment Officer of the Company; and Miss Fang Liu, IR Manager of the Company. Mr. Chan [ph], please go ahead..

Hello, everyone. Welcome to Concord Medical's fourth quarter and full-year 2015 earnings conference call. Concord Medicals' earnings release was distributed earlier today and you can find a copy on our website as well as on newswire services. Today, you will hear from Dr. Jianyu Yang, Concord Medical's Chairman and the Chief Executive Officer; and Mr.

Adam Sun, Chief Investment Officer. After their prepared remarks, Dr. Yang and Mr. Sun will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S.

Private Securities Litigation Reform Act of 1995 and within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.

Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. Concord Medical does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Both our earnings release and remarks made during this call include a discussion of certain unaudited non-GAAP financial measures. Our earnings release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. As a reminder, this conference is being recorded.

In addition, a webcast of this conference call will also be available on Concord Medical's website. I will now turn the call over to Concord Medical's Chairman and CEO, Dr. Yang..

Hello, everyone. Welcome to the Concord Medical fourth quarter and full-year 2015 earnings conference call. We have released our financial performance earlier today which is available on the SEC website and Concord Medical Investor Relations website. Later, our Chief Investment Officer, Mr.

Adam Sun, will interpret the report; and I would like to take the opportunity to present you the achievements we have made during the last year's strategic transformation and our strategic plan in 2016 and in the future. The year of 2015 was crucial for the Company's strategic transformation.

During the last year, we have laid a solid foundation for continuous and stable development by acquiring Concord Cancer Hospital in Singapore, optimizing its operating segments and medical processes through working closely with our strategic partner, MD Anderson Cancer Center, MDACC for short, although the hospital experienced net loss during the year 2015.

Facing the huge demand of Chinese patients, we're very confident with the future development of this hospital.

In 2016, well prepared to receive a large number of high-end patients from Inland China, Concord Cancer Hospital will provide world-class integrated cancer treatment, including the utilization of the most advanced immunotherapy and targeted medicine based on the comprehensive cooperation between Concord Cancer Hospital and MDACC.

We will make great efforts at our Singapore hospital to comply with MDACC alliance demand for quality standards. Under the guidance of the MDACC team, we have finished the pre-overall design work of Concord cancer hospitals in Shanghai and Guangzhou. The construction of the two hospitals will start this year.

After the construction is finished, these two hospitals will function as MD Anderson's sister hospitals in China by providing the same treatment process with MD Anderson to the Chinese patients.

Since 2012, Chinese Government has published a series of policies to facilitate medical reform by encouraging social capital, private capital to invest in the medical industry and form a diversified industrial landscape.

Accordingly, we started our strategic transformation in 2013 by transforming the cooperative centers with public hospitals into self-owned centers, taking advantage of our talent pool and years of experience to build our own brand, Meizhong Jiahe Cancer Center.

We will build the brand of Meizhong Jiahe into the largest radiotherapy chain throughout the country, providing high-quality medical services featuring imaging diagnosis and radiotherapy. Datong Meizhong Jiahe Cancer Center will launch its grand opening and start to treat patients at the end of April.

It will become our first freestanding center in the Concord Medical network and set a milestone for the Company's strategic transformation.

In order to fully unleash the value of the Company, we announced to list our subsidiary, Meizhong Jiahe Hospital Management Company, on the New Third Board in China in the second half of last year and officially received the approval to become a listed company on the new Third Board at the end of 2015.

Now we're undertaking efforts restructuring and planning to launch a private placement. The funds raised will be used for the acquisition and construction of cancer centers. Healthcare industry will become a real sunrise industry in China. We intend to capitalize on this growing opportunity and take full advantage of favorable government policies.

Providing the most advanced treatment technology and medical process, as well as the most humanistic care, we will contribute to overall cancer treatment and diagnosis in China, while also generating long term stable returns for our shareholders at the same time. Thank you. Now I would like to turn the call to our Chief Investment Officer, Mr.

Adam Sun..

Thank you, Fang. Welcome, everyone, to our call. First, I would like to review the highlights of our 2015 full-year financial results. Our total net revenues in 2015 were RMB616.5 million or $95.2 million, representing 1.6% increase from RMB606.9 million in 2014.

Our total net revenue is composed of net revenue for network business of RMB597.7 million or $92.3 million, compared to RMB606.9 million in 2014. The decreased net revenues for network business were mainly due to closed centers in 2015. Net revenue for hospital business was RMB18.7 million or $2.9 million.

Cost of revenue in 2015 was RMB353.3 million or $54.5 million, representing a 28.7% increase for RMB274.6 million in 2014. Total cost of revenue is composed of cost of revenue of network business of RMB321.3 million or $49.6 million, compared to RMB274.6 million in the fourth quarter of 2014.

The increase was mainly due to the increased cost caused by cost-sharing split change according to the contracts signed between the Company and the public hospitals and increased medical consumable expenses and maintenance expenses for the network. Cost of revenue of hospital business was RMB32.1 million or $4.9 million.

Gross profit in 2015 was RMB263.1 million or $40.6 million, representing a 20.8% decrease from RMB332.3 million in 2014. Gross profit margin in 2015 was 42.7% compared to 54.8% in 2014.

Due to the net loss in the Q4, for the full year, we have net loss attributable to ordinary shareholders of RMB79.4 million or $12.3 million, compared to net income attributable to ordinary shareholders of RMB124.7 million in 2014. Basic and diluted loss per ADS in 2015 was RMB1.77 or $0.27, respectively.

Income tax expense in 2015 was RMB74 million or $11.4 million, compared to RMB80.9 million in 2014. Adjusted EBITDA, non-GAAP, was RMB186 million or $28.7 million, in 2015. For the fourth quarter, our total net revenue were RMB135.1 million or $20.9 million for the fourth quarter, a 15.7% decrease from the fourth quarter of 2014.

Total net revenues were composed of net revenue from network business of RMB130.4 million or $20.1 million; and net revenue from hospital business of RMB4.7 million or $0.7 million. Cost of revenue in the quarter was RMB87.5 million or $13.5 million, as compared to RMB73.3 million for the fourth quarter of 2014.

Total cost of revenue was composed of cost of revenue of network business of RMB78.2 million or $12.1 million; cost of revenue of hospital business of RMB9.3 million or $1.4 million. Gross profit was RMB47.6 million or $7.4 million, for the fourth quarter of 2015, representing a 45.2% decrease from the fourth quarter of 2014.

The gross profit margin for the fourth quarter of 2015 was 35.3% as compared to 54.3% for the fourth quarter of 2014. The loss attributable to ordinary shareholders was RMB166.8 million or $25.7 million for the fourth quarter of 2015 compared to net income attributable to ordinary shareholders of RMB28.1 million in the fourth quarter of 2014.

The net loss included net loss from network business of RMB38.5 million, net loss from hospital business of RMB18.2 million and loss resulting from bad debt of RMB9.3 million, asset impairment of RMB23.1 million, as well as withholding tax expenses of RMB77.7 million.

Basic and diluted loss per ADS for the fourth quarter of 2015 was RMB3.74 which is $0.58. Now let me talk about our financial results for the fourth quarter by segment.

Network business, net revenue from network business decreased by 18.6% to RMB130.4 million or $20.1 million in the fourth quarter of 2015 from RMB160.3 million in the fourth quarter of 2014.

The decrease was primarily attributable to network centers closed during the year and revenue-sharing split change according to contracts signed between the Company and our hospital partners. As of December 31, 2015, the Company operated a network of 127 centers in 53 cities in China; has entered into agreements to establish one additional center.

The Company had no centers newly opened or closed in the fourth quarter of 2015. Gross profit for the network business was RMB52.2 million or $8.1 million in the fourth quarter of 2015, compared to RMB86.9 million in fourth quarter of 2014. The gross profit margin of the network business for the fourth quarter of 2015 was 40.1%.

The decrease in gross profit was mainly due to the revenue-sharing and cost-sharing split change according to the contracts signed between our Company and our public hospital partners, as well as higher cost of revenue attributable to the increased high-value medical consumable expenses and maintenance expenses for the network.

Hospital business, Concord Cancer Hospital is a leading privately owned, for-profit oncology hospital in Singapore. The Company acquired Concord Cancer Hospital, formerly known as Fortis Surgical Hospital, in April 2015 and is now transforming it into a specialty cancer hospital.

Net revenue from the hospital business was RMB4.7 million or $0.7 million. Cost of service for the hospital business for the fourth quarter of 2015 was RMB9.3 million or $1.4 million. Gross loss for the hospital business was RMB4.6 million or $0.7 million, in the fourth quarter of 2015.

Concord Cancer Hospital operated 31 beds and had 85 medical and non-medical staff as of December 31, 2015. Turning the attention to our consolidated balance sheet, accounts receivable was RMB218.3 million or $33.7 million, as of December 31, 2015, compared to RMB265 million as of December 31, 2014.

The average period of sales outstanding for accounts receivable, also known as days sales outstanding, in 2015 was 145 days for the network business compared to 159 days in 2015 and 49 days for hospital business respectively. Capital expenditure was RMB198.5 million or $30.6 million in 2015, compared to RMB107.8 million in 2014.

As of December 31, 2015, the Company had cash and cash equivalents of RMB485.4 million or $74.9 million and restricted cash of RMB350.3 million or $54.1 million, compared to RMB478.7 million and RMB392.3 million respectively, as of December 31, 2015.

As of December 31, 2015, the Company had bank credit lines totaling RMB3.3 billion or $510.2 million, of which RMB1.2 billion or $183.7 million, were utilized. Total property, plant and equipment net valued at RMB918.8 million or $141.8 million, as of December 31, 2015, compared to RMB749.7 million as of December 31, 2015.

During the past year, we have been steadily and firmly carrying out our strategic transformation, strengthening our collaboration with MD Anderson Cancer Center, as well as optimizing and integrating the business of Concord Cancer Hospital in Singapore.

Looking ahead, we expect to see Concord Cancer Hospital to provide cancer treatment to more patients and generate more revenue. As of March 25, 2016, Concord Medical has repurchased 1,178,344 ADS, representing 3,535,032 ordinary shares, for an aggregate consideration of $5.8 million.

This share repurchase program demonstrates the confidence we have in the Company and its growth prospects. We believe that purchasing our stock will be a very prudent use of our funds and is consistent with management's goal of increasing shareholder value. That concludes our prepared remarks today. Now we would like to open up the call to questions.

Operator, please go ahead..

Okay. Thank you for joining us today. Please don't hesitate to contact us if you have further questions. Thank you for your continued support. Have a good day..

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect. Thank you..